Spending on prescription drugs continues to be one of the fastest-growing healthcare costs facing consumers. Factors that have driven the increases in drug spending include increased use of disease-preventative and quality-of-life enhancing drugs by patients, direct marketing to patients by pharmaceutical companies, changes in use to newer, higher-cost drugs, and price increases by manufacturers. A particular problem with prescription drug costs is that many patients who lack prescription drug coverage often pay more for prescriptions than those who do have coverage. This is usually due to “cost shifting” by pharmacies, who attempt to collect larger profit margins from patients with limited buying power to compensate for the reduced profits available from insured patients having prescription plans with negotiated price schedules. The result is that uninsured patients, who have little or no market leverage as individuals, pay higher prices for prescriptions than other payers in the marketplace, such as third party payers, insurance companies, the government and the like. In order to assist those individuals who lack prescription drug coverage, discount drug card programs have been employed by Prescription Benefit Management (“PBM”) companies and others wherein subscribers to the programs receive monetary discounts from participating pharmacies. Even though such plans are usually “100% co-pay,” meaning that the patient pays 100% of the net price for the prescription drug at the time of dispensing, the plans are intended to provide price discounts to patients as a result of the PBM's buying power and contracts with participating pharmacies. Under such contracts the PBM negotiates a discounted price for prescriptions for its subscribers. Many discount prescription drug card plans also include some form of patient advocacy. A common form of patient advocacy is a drug regimen review (“DRR”), which is a process of reviewing the patient's medical history and current medications to check for potential drug-related problems relative to a prescribed medication alone or in concert with other prescriptions that the patient may be taking. A DRR may check for such potential problems as adverse reactions, drug/drug interactions, therapeutic duplication and overutilization. Another patient advocacy function is to ensure that the drugs prescribed for the patient are listed on an approved “formulary.” In general, a formulary is a list of drugs that are considered by a prescription benefits plan to be the preferred treatment for a patient's condition among medical equivalents. The criteria for the preferences may be for medical reasons such as safety and efficacy. Other criteria may include economic considerations such as cost-containment and market-share shifting. However, since the discount drug card programs require that the patient pay 100% of the price of the prescription at the time they receive the medication, and since the pharmacist is not required to coordinate benefits or discounts through a third party, there is no assurance that the patient will receive the discounted price and patient advocacy that the pharmacy had contracted to provide under the terms of the discount drug card program. Pharmacies are generally not motivated to incur the additional expense and labor of a discount card program without a financial benefit or incentive to do so. Thus, under a non-monitored prescription drug discount card program wherein the pharmacy receives 100% of the payment directly from the patient at the time of dispensing there are few, if any, checks and balances to hold the pharmacist accountable to a third party for payment for their services. The result is that the patient may not derive the expected benefit from being a subscriber to a prescription drug discount program.
The Centers For Medicare and Medicaid Services (“CMS”) have proposed a program that includes a CMS discount card that is essentially a 100% co-pay discount card that would be offered by approved PBMs throughout the country. The PBMs would be required to undergo an application process to be approved for participation in a CMS endorsed program. The patient could then use their card to have their prescriptions filled at participating pharmacies. A shortcoming of the CMS plan, like others in the art, is that there is a decreased likelihood that the patient will receive all of the intended benefits since there is no requirement or incentive for the pharmacy to follow the program procedures or coordinate with the PBM. Likewise, under the CMS plan there is no assurance that the participating pharmacies will offer patients a proper discount on their prescription prices since there no means of holding the pharmacies accountable for bypassing reporting procedures. Under the CMS program there is a suggested opportunity to share a portion of rebates received by the PBMs with the patients. However there is nothing in the CMS program mandating that the PBM share in any of those savings. Overall, the CMS plan is not expected to be very effective.
There is an abundance of 100% co-pay drug discount programs. For example, nearly every major PBM offers such a program. In addition, many major chain pharmacies have designed their own 100% co-pay programs. Discount plans have also been offered by pharmaceutical companies for their particular brands of drug products. Still other 100% co-pay programs are sponsored by large membership groups such as AARP. Some discount programs are business enterprises, such as a nationally-advertised discount prescription card program known as The Peoples' Prescription Card (“PPC”). For a monthly subscription fee, PPC advertises that subscribers will receive a range of discounts for prescriptions filled at either participating pharmacies throughout the country or through a mail-order prescription service. Although these plans have various benefits and features, they all suffer from a common shortcoming in that the patient is not assured of receiving the proper discount and patient advocacy.
Since the current 100% co-pay programs are generally ineffective, many patients are unable to purchase needed medication because it is too expensive. Such patients are considered to be “undertreated.” Undertreated patients are prone to chronic disease and multiple chronic diseases, and often must be hospitalized at a greater expense to the healthcare system. Further, many hospital admissions of seniors are a result of drug related problems such as adverse reactions and drug interactions. There is a need for a prescription drug benefit program that consistently provides drug price discounts and patient advocacy services while holding down the cost of the program.